Gas prices down in '13, set to go lower in '14

Drivers fueled up for the lowest price in three years during 2013, according to AAA, and even lower prices are expected in 2014.

The motorist group reports that the national average price for a gallon of regular gas was $3.49 in 2013. That's down about 12 cents from the record price set in 2012 and is a couple of cents cheaper than 2011.

"It was a relief to see gas prices decline in 2013 following record-breaking pain at the pump in recent years," said Avery Ash, an AAA spokesman. "Our hope is that prices will continue to fall as cars grow increasingly fuel efficient and refineries expand production to take advantage of the recent boom in North American crude oil."

Tom Kloza, chief oil analyst for the Oil Price Information Service, which tracks prices for AAA and GasBuddy.com, said the boom in North American oil production in recent years has given the continent the lowest price for crude oil anywhere in the world.

He said gasoline consumption has been dropping on an annual basis in recent years as well, although there has been a rise in demand the last four months of the year. That has lifted prices by about 10 cents a gallon from the low of the year on Nov. 11, when the national average was just under $3.20 a gallon.

Kloza said the rise since then is actually good news in that it's a sign of a stronger economy. Lower unemployment means more people need to drive to work. More also are spending money to take vacations. But even if the economy continues to improve, Kloza agrees that 2014 should see lower prices on average due to continued increases in production.

The daily average price has stayed above the $3 mark for the last three years, although there were a dozen states where the average price fell below $3 at some point in 2013.

Kloza said the uneven use of North American crude by refineries in different parts of the country is leading to volatile prices in different regions, and he expects that to continue in 2014. He said access to oil from Canada and the U.S. Great Plains will help prices in the middle of the nation.

AAA said South Carolina was the state with lowest average price for the year at $3.24 a gallon. The highest average state price was in Hawaii at $4.24, with California having the highest price in the continental United States at $3.89.

Casper, Wyo., was the metropolitan area that enjoyed the lowest average price at $3.15, with Wailuku, Hawaii, having the highest at $4.64.